We have such a good panel because we get to rethink about how governments and companies are doing revenue in the future. Now I just want to remind everyone that there is a QR code that will come up on the screen, and you can also send questions. So I have my trusted New Economy Forum iPad for anything that you want to ask. So gentlemen, thank you so much for joining us. Look, in a world of growing geopolitical uncertainty, what are some of the key factors determining where businesses choose to invest? Mr. Mittal?
Well, I think we are really passing through very interesting times, if I may say, and in some sense difficult times. And as yesterday, my friend Chandra from Tatas pointed out, a lot of things are playing at the same time, which is a unique situation. We have geopolitics in real turbulent times. Oil prices are shooting through the roof. Supply chains are broken. Most of the investments are suddenly going into one direction of AI and the AI ecosystem. To manage all this, where capital starts looking for opportunities becomes a real difficult question. And I think it is times like this when countries which are large-scale, big population, large consuming population like India becomes a natural choice. Growing at over 7% a year, which is a rarity, which our Prime Minister mentioned yesterday, and then having the capability to harness all the technologies at scale, I think puts India at a very strong position.
Your Excellency, from a Qatar point of view, and again just the region, how do you look at attracting capital?
I think, Francine, ultimately the investors look at the fundamentals. You have a strong economic foundation. You have the right business-friendly regulatory environment, continuous investments into infrastructure, prudent fiscal policies. These are what lasts. Conflicts and the like are temporary, and as long as you have those, the investors will ultimately find you. Maybe I disagree with Sunil, as everyone sells their own book. I guess smaller countries with smaller populations are actually more attractive now, with the bigger push into AI, energy intensity, and a small population. It's actually a very attractive story now.
I mean, the good thing is that there's capital for both, because there's a lot of capital chasing investment. So you're right. What makes a country or a city differentiate itself when you look at so much capital trying to go to different places? What's the differentiating factor?
I think, as I said, it's making sure that you have the right fundamentals first and foremost. Once you have that, you make sure that you do offer top-of-the-line infrastructure, whether it's what we offer in Doha — we would say the airport, the ports, digital infrastructure, access within the region, access to MENA, access to GCC — that investors do find attractive. Stability is a big thing. Maybe if we can address the elephant in the room, obviously conflict in the region is a thing. It's not the first time we've had conflict. It won't be the last time. We tend to come out stronger every time.
Does the conflict really hurt your business model?
Not really. I think, yes, it has affected most when it comes to oil and gas. I think that sector has been affected the most. Sorry. We have found ways around it when it comes to food security, when it comes to getting things in and out of the country. I think a good example we like to use is our strategic food stock has actually gone up 40% since the beginning of the war versus today. So we're able to find ways around it.
Mr. Mittal, I was going to ask you what governments can do to help businesses, but first, what's your number one concern right now? Businesses need to grow. Is it supply chains? Is it geopolitics? Is it access to capital?
I think, if I take into account the countries that I operate in, the most important part is policy stability. Investors, local or international, look for policy stability, and I think that's what you have been seeing in this country for the last 10 years now. There's predictability, there's policy stability. Some can quibble that the pace of reforms can be faster, and I think we heard the Prime Minister say yesterday that reform processes never end — you just keep on moving through the reforms. But policy predictability, stability, foreign direct investment regime are in a very good place. I think that's very important. And I would say I operate in a number of African countries where Sheikh Faisal is also having a keen interest from his vantage position, which also has reasonable stability in policy. Of course, the growth vectors are very different between India and Africa. So I would say policy stability. The other part is currency. I think that's where India in the last year and a half has had some blips. The rupee has depreciated, and principally on account of supply chain disruption and oil prices. That is something which, I mean, countries like Qatar or UAE or Saudi are blessed to have a lot of reserves of oil and gas. India has to import a lot of that. So I think if you put that aside as a temporary phenomenon, I would say longer-term policy stability and growth is here.
I mean, political stability is not always up to the head of state, right? If they get ousted, we've seen especially this in a number of European countries. So how do you balance market opportunity, growth opportunity, and political stability that may or may not be there in a couple of years?
Well, having now the benefit of operating in Europe — I have a company in France and I'm the biggest investor in British Telecom — I can tell you while there is more predictability, there's no growth there. So just having predictability or rule of law or solid policies don't help if there is no growth, or rather many of these companies are actually degrowing. So that doesn't work as well. So therefore I would say, at the cost of repetition, that India does become a place which can draw a lot of investment. And the good news is smaller countries, whether it's Singapore or Qatar or UAE, they have so much capital to deploy which they need to deploy outside, and that's where I think there's become a very strong symbiotic relationship between Qatar and India, India and UAE, India and Saudi, India and Singapore. And more importantly, I would say, the new wave of bilateral trade agreements. India has done its trade agreements with New Zealand, with Australia, recently with the UK which has come into action a few days back. Europe is about to be signed. Canada is in advanced stage. US is a question mark. I think that is helping India also go up on the trade factor.
The question mark is very clearly because the US, being the largest partner with India, is still a work in progress. And I think when you have over a hundred billion dollars of trade going out of India to the US and there are higher tariffs or questions around what next, it does cause a problem.
Your Excellency, you were talking about some of the right conditions, of course, that governments are putting in place to grow businesses. What do you think will happen in the next six to 12 months? What are some of the conversations that you're having with private investors wanting to come to your country?
Maybe I'll echo what Sunil just said. Fundamentally, you have the right policies, you have the right foundation in the country. That's ultimately what the investors look at. I think investors are smart enough to differentiate between temporary disturbances versus structural issues within the economy. I think a good example that we're now seeing — over the last three months, we've had 5,000 foreign-owned companies register in Doha. We've seen capital inflow of foreign investments into our capital markets over the same period. So people are understanding that what is happening is not structural. It's not permanent. The IMF prediction is minus 4% this year but almost a positive 19% next year. So everything we lose today we will gain back and then some, hopefully.
I mean, what's the most frequent question that you get asked if things go back to normal?
So again, everyone knows that things will get back to normal. I don't think anyone can answer you when. That's the very difficult question that we try and figure out every day.
Mr. Mittal, from your experience in building and expanding some of these businesses across markets, what do you think are the most important factors of government support? Concretely, can you give me an idea of when you went into a market and actually — I don't know if it's the regulator or actually government support that really changed the way that you wanted to invest money, because you've always taken very big bets.
Yeah, I would say, from the government point of view — I am in a regulated industry. The entire telecom chain becomes regulated, whether it's on terrestrial levels or in space, and the government policies are very important. Spectrum allocation, spectrum pricing becomes a fundamental ingredient for the success of any digital play. I think that India has now over the last, I would say, decade, put out very good policies. There's a spectrum auction every year or two years, so there's enough spectrum available. You can plan ahead of time. The bands which are available in coordination with the ITU are clearly listed out. Space is a work in progress in India. I think India is at a very advanced stage where some final approvals of security clearances are awaited, and once that happens we'll be able to connect every square inch of the country. In Africa we already started to launch satellite services in partnership with OneWeb, with Starlink. And finally, if digital is a multiplier for the economy, then the tax regime for digital goods, digital services, telecom needs to be as low as possible.
Out of those three that you mentioned, where are you most excited about in terms of opportunities? Outside India or within India?
Both. Well, within India our main focus now is turning towards data centers. We are now moving from about 300 megawatts to a gigawatt within the shortest possible time frame, and a number of data centers are being built in South India and near Mumbai and around Delhi. So that is one area. I think sovereign cloud is becoming the next area of focus for us. Every country is becoming very concerned about sovereignty, digital sovereignty, and more importantly, ensuring that your data is protected and within the country. So Airtel, our company, is now working very feverishly towards setting up our own sovereign data cloud on which we can serve Indian enterprises, government, defense forces, and that's becoming another area. So I would say AI stack through data centers and cloud.
This goes to the heart of digital transformation and artificial intelligence. So how should governments think about some of these big sectors so that they don't feel left out in five years?
Ultimately, data sovereignty is probably the key. You will require a lot of data storage in-country in every country. So development of data centers is something that will happen all over the world. I think we are definitely doing something around that within Ooredoo, which is our national telecom company, with Kai, which is our new national champion which we announced in October last year. We're doing quite a lot around this, and this is where, as I said, being energy-rich actually is a boon for that sector.
Can you both give me an example of things that didn't really go to plan? You don't have to give names or governments, but is there an example of something that didn't go to plan that actually was a bad policy that made you shy away from investing?
I would say the movement in AI is so fast that the government is finding it difficult to catch up to put up regulation. India is now putting out a consultation paper as to how to regulate — if at all we call it regulation — or put guardrails around how AI will operate. I mean, every day when the news starts to come in from the very founders of the technology that we now have a fear that our agents may run rogue, that's not something that we can take lightly or a country can take lightly. So suddenly you're seeing a scrambling around the government corridors, policymakers, to say how we can secure our nation when we introduce AI in every aspect of our lives. The fact is people are already using AI, agents are proliferating. Are we going to wake up only when an accident happens, or do we do it before?
Do you worry about that? Do you worry we're regulating too soon, or do you worry about...
I think we need to start to think about the regulation. I don't think we need to stifle it or stop the growth of it. But equally, it would be foolish for anybody to think that we can let it flow to a level and then if an accident happens we'll think about it. I think it's time to start to decide now. And I think that is where again I would quote the Prime Minister. He spoke about the aviation industry. The global aviation industry has a global code of conduct — how slots are allocated, how flights are taking place, how the entire aviation industry globally, regardless of which country or which nationality or which flag you carry, you're stitched together. The AI ecosystem cannot live in isolation, whether it's a Chinese system or a US system. It's got to be a global system, and that conversation unfortunately is not happening at pace.
How do you see this ecosystem evolving?
I think I agree with what was said. I think two clear examples that we've faced in the past is stifling regulation and high tax rates. We've run examples where we've not invested in a data center in a certain country just because their data-sharing policies were really outdated. We had a whole program that would create jobs and create value in-country, but ultimately we couldn't come through with it just purely on the data-sharing part. High taxes — obviously every country will compare to the next country over. When you're 60% versus a 45% effective tax rate, it does really hinder what you can do.
Is it difficult to draw the line between enabling business to grow and being too involved in the private sector?
Yeah, I think there's got to be a fine line. The good news is that most of the governments are letting the private sector flourish and don't intervene too much. In fact, sometimes when us in the industry seek the government out because we want them to come in, because there is a free-for-all or a chaos developing in a particular area, like in the case of AI, it's a very unusual situation, I would say. But the private sector by and large will say, lay out the rules, put out the policies, and let us fly. And that is the true capitalism at work. I mean, we have seen this in the US, which has become the large economy, but then you also have the Chinese model where there's a lot of intervention and yet they have grown companies. Both models can work. But in a democracy, the way we operate in, I think our model has to be more let the private sector flourish. But we must have the government's guardrails. Taxes must be collected in time. Tax leakage should not be there. Efficiency should be there. India, with this digital stack, and importantly, most of the touchpoints now moving on to digitally-enabled services, I think India has tried to do very, very high-quality, frugal innovation to serve its nation.
